The Pitchbook report shows that artificial intelligence and machine learning continued to dominate early-stage venture capital investment in the third quarter of 2024.
Investors remain confident in AI/ML
According to Pitchbook’s Emerging Tech Indicator report, artificial intelligence (AI) and machine learning (ML) continued to dominate early-stage venture capital (VC) investment in the third quarter of 2024. While AI companies/ ML raised approximately $2 billion in 42 deals. , outpacing biotech funding by more than four times ($472.5 million), the total was significantly less than the $8 billion raised in the second quarter across 53 deals.
This decline was largely attributed to two outlier deals: xAI’s $6 billion funding round and Safe Superintelligence’s $1 billion raise. In addition to these two, the report suggests that AI/ML funding activity remains strong, indicating continued investor interest in the sector.
“Excluding these outliers, third quarter financing reflects a constant normalization of activity, with agreements
volume that underlines the continued interest of investors across the sector,” the report explains.
Pitchbook data reveals a surge in fintech funding during the third quarter, with companies raising $449 million, nearly double the $228.4 million raised in the previous quarter. While funding increased, the number of deals decreased from 25 in the second quarter to 18 in the third.
The key fintech funding deals involved Slope, which raised $65 million to expand its merchant finance and payments platform. Neo Asset Management raised $47.9 million and Coast raised $40 million to improve its fleet payment card management system.
The report also highlights a significant increase in investment activity in Web3 and decentralized finance (DeFi), with funding increasing from $93.9 million in the second quarter to $373.8 million in the third quarter. This increase is attributed to renewed investor interest in blockchain technologies and decentralized platforms.
Story Protocol and ID Planet led the way, each raising $80 million in Series B rounds. Partior, a blockchain-based cross-border payments platform, raised $60 million in a Series B funding round, while Chaos Labs , a cloud-based blockchain platform, raised $55 million.
